If your child has special needs, there are so many things to think about. Between getting the child help right now and thinking about what happens when they turn 18 and you no longer have the legal authority to make medical and financial decisions; here are two options:

• Advance Directives – Advance directives, if the young adult has capacity, can be tailored to meet the individual’s specific circumstances and be an excellent way to keep trusted relatives involved while ensuring that young adults direct their futures. Unlike guardianship, advance directives do not involve the surrendering of any rights, and they can be changed over time. 
• Guardianship – Guardianship is a legal proceeding where someone, usually a family member, asks the court to find that a person is unable to manage his or her affairs effectively because of a disability. A guardian is then appointed to make the decisions for the person with special needs.

In addition, it is also advised that you write a memorandum of intent. A memorandum of intent is used to memorialize your knowledge of your child’s needs so that you may guide future caregivers, guardians, and trustees in providing the best possible care to your child. Simply put, a thoughtful letter of intent ensures that those who come after you need not waste precious time figuring out the best way to manage and care for your child.

After that, the next step is planning for their financial future.

Planning for their future:

This includes deciphering what government benefits your child qualifies for and how to protect their assets. There are numerous trusts available to help plan for your child with special needs financial future including special needs trusts and pooled trusts.

Let’s take a look at one of our recent clients.

This family consisted of a single mother, two daughters (one of which is special needs) and a son. The mother was in relatively good health with no specific medical conditions with assets totaling $525,000. The estate is currently being split with 2/3 going to the well daughter and 1/3 going to the son. The well daughter is getting her sister’s share in an effort to protect and manage the share for her sister.

The client’s objective is to make sure that all of her children, including the child with special needs, inherit equally upon her demise. In doing so, she has a few options.

1. Create a third-party Supplemental Needs Trust. By creating a Third-Party Supplemental Needs trust for the benefit of her special needs child, the client is going to allow for others to also contribute to the trust and will make sure that the child will maintain any government benefits that they are receiving. This trust will also guarantee that assets are set aside for the child and they will not become subject to any marital financial issues of the sister who was originally holding the funds.
2. Create an Irrevocable or Revocable Trust for herself. Which one will depend on the mother’s planning objectives. In that trust, there should be language that creates a supplemental needs trust for the special needs child within the mom’s trust. When the mother passes, the assets will pass to the trust within her trust for that child.
3. Update her will to include a supplemental needs trust within the will for the benefit of the child. Upon the mother’s passing the assets will pass to the trust within the mom’s will for that child.

As you can see, this mother has a few options she can make based on her preference to ensure her child with special needs is well taken care of after she is gone. By working with a professional and looking at the options, you have the power to set up your child with special needs for financial preparedness in the future.